FOXTROTS 

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2006 July 20

 

Little
Macau gets big.

 As many will know, I am an expert at studying a situation unencumbered with any local issues. This skill enables me to oscillate merrily from being uncannily accurate to awesomely wrong. 

With this in mind, I turn to
Macau. In its recent history, say 100 years, it has been considered a country-boy cousin of big-city neighbour
Hong Kong, and this sentiment still largely remains.  

Time to rethink. Firstly, with the main numbers. There are around 11,000 hotel rooms at present. Within 10 years that should be 50,000 – due to open at a fairly-even pace. That is about the same as
Hong Kong today; HK may be at 65,000 rooms then. 

But growth of that magnitude will affect rates. Currently,
Macau’s hotel results are well below
Hong Kong’s – near-15 points in occupancy, and around US$50 in rates. 

Will that performance gap widen as
Macau discounts to fill hotels, which will include some with 3000 rooms? Or will
Hong Kong’s rates adjust? After all, the journey from Macau to Hong Kong’s airport by sea is about the same time as from the central district of Hong Kong – that is travel time, however, and the bits before and after are currently a hassle and time-consuming. And if the proposed bridge from Lantau to
Macau gets built, then travel time to
Macau from
Disneyland will also be about the same. 

And that is without looking at what
Macau is building in terms of entertainment attractions. There seems no reason why the companies that are now building in
Macau – including big international names – will not make
Macau what
Las Vegas has become. Which is not just the gambling capital of the world, but an entertainment capital as well. 


Las Vegas attracts meetings business and people on holiday – as well as gamblers.
Macau may well race past
Hong Kong – which, remember, once aspired to be
Asia’s entertainment capital. 

 

 

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